Nexon recently launched its IPO on the Tokyo Stock Exchange at $16.65 per share, saw the stock initially sell slightly higher at $16.74 before it fell to $16.00 the next day. Still, the online company raised $1.17 billion after selling more than 70 million shares, which the publisher plans to use for expansion into new regions and acquiring other companies.
“We’ve got pretty broad sales growth across the world,” said Nexon CFO Owen Mahoney. “We’re really excited about China. Some people debate whether China’s got a lot of growth in it. We think China is very early days. We want to have currency and cash on hand to be able to move aggressively if and when opportunities come up. We like to buy teams and properties early in their life. We can really bring a lot to the table. We know how to tune a game so that people will play it for months on end.”
Some wonder if Nexon came out at the right time, given that they’re more predisposed to social games rather than more popular mobile games in Japan. Their results may effect Zynga, which operates using a similar model. “The stock price might have been higher if it was listed when social games were hotter,” said Yoshihiro Okumura at Chiba-Gin Asset Management Company in Tokyo. “The social games theme seems to be cooling down.”
“It may be difficult for Nexon to win in Japan,” said Cosmo Securities senior analyst Tomoaki Kawasaki. “The Japan market is all about mobile, and Nexon is a bit of a laggard in that area. A user has only 24 hours a day. For a game company in general, what’s important is how much of that time they can capture.”
Source: Bloomberg {link no longer active}
